Ediston Property Investm... Share Discussion Threads

[tag57] 31/3/2023 19:38

Anyone know what caused the drop today?

[dlp6666] 30/3/2023 20:38

For the tally, another decent-enough, if now fairly familiar, email reply from William Hill arrived today:

"Thank you for you email below and taking the trouble to write. The Board is particularly keen to hear from the Company’s smaller shareholders and I would actively encourage you to communicate your views going forward. I can assure you that they will be shared with all the directors and advisors to the Company.

The process we are going through prevents me responding to specific questions on an individual basis so I hope you understand why I cannot respond directly to the confirmations you are seeking. However, as a fellow shareholder I can certainly understand where you are coming from."

(I had asked him to confirm there was a strict cap on costs and timing)

[skyship] 30/3/2023 20:11

If they are that big then surely no way would they be interested in a UK microcap. Would never even have heard of EPIC!

[williamcooper104] 30/3/2023 15:51

It's more the old super model not getting out of bed for less than $200m v $40bn market cap But they might

[williamcooper104] 30/3/2023 15:50

Completely - there's a number of US REITs who have market caps greater than all UK REITs (and probably UK plus Europe too)

[riverman77] 30/3/2023 15:19

Wow - 41bn market cap and never heard of it. Makes the UK REITs look incredibly insignificant.

[flyer61] 30/3/2023 15:15

Sky it is just O

Juggernaut, with a market cap probably bigger than all UK Reits together.

Pays a monthly dividend too ;-)

[spectoacc] 30/3/2023 15:14

Do they want an EPIC might be the better question... ;)

[skyship] 30/3/2023 15:10

Edinandy - Reality Inc. Tst - never heard of them.

Is that a US operation. Do you have an EPIC?

Thnx...

[spectoacc] 30/3/2023 15:00

Stamp duty point is a good one. TRY get to exit their 17%, but holders lose out on the future yield and the chance to invest in an IT that's just RP's.

Singularly unimpressed with the chairman so far. Maybe there's a bluff going on with this review to find a merger partner rather than getting sold, hence the stated preference for one.

[williamcooper104] 30/3/2023 14:50

Yep - when said they would "merge" with a reit O came to my mind - even if a bit small for them (hence why better to get on and buy more assets) Their current WACC is about 6.5-7 percent and they are targeting a 100bps premium over that, so they could make the numbers work paying NAV for EPIC (especially considering minimal stamp duty on share purchase)

[edinandy] 30/3/2023 14:20

I suspect Reality Income Trust will buy them...money to spend and like retail parks...

[skyship] 30/3/2023 07:45

re Oliver Shah's article in React. He only quotes two stats; and manages to get one totally wrong.. Like many journalists better with the waffle than the data.

At 62.5p EPIC stands at a 22.8% discount to their Dec'22 NAV; so why state 35% to their Sep'22 NAV?

[williamcooper104] 29/3/2023 22:16

Would dilute SUPRs core strategy - though do see the synergies

[williamcooper104] 29/3/2023 22:15

Yep most likely either a portfolio sale and liquidation or carry on As we've all noted - best thing is to either do a deal or get on with the business

[alan pt] 29/3/2023 22:12

SUPR is still the only one I can see that makes a bit of sense

Discount not so much different now, SUPR frees up cash and needs income to cover divi with the sale back of Sainsbury properties. EPIC already has RPs with supermarket anchors, there's definitely some fit there

However, managing a REIT where I guess you only have to talk with a few head office staff at 3 or 4 supermarkets seems very different to the more detailed, hands on approach needed for RPs

Merger still seems unlikely

[williamcooper104] 29/3/2023 21:03

Oliver Shah in React Capco and Shaftesbury; LXi and Secure Income; Workspace and McKay; LondonMetric and Mucklow: whisper it, but consolidation in the listed segment is finally happening. We all know the obstacles to corporate dealmaking – management team turkeys tend not to vote for Christmas, and discounts to net asset value can make the numbers awkward.But we also know the REIT sector needs bigger, more liquid companies to attract the attention of generalist investors. This wave of mergers and acquisitions is long overdue.Ediston Property Investment Company (Epic), the quoted owner of 11 regional retail parks, did its bit for the cause this month. It put out a statement saying, in effect, that it had reflected on its position and decided it needed to find a merger partner, sell itself, or liquidate its portfolio and return the proceeds to shareholders.Epic, which has a market cap of around £130m, summed up the argument for wider PLC real estate M&A when it said: "The company, like many of its peers, remains of a size which might deter some potential investors. Challenges as to liquidity, the ability of larger investors to achieve their desired quantum of investment commitment, market profile and cost efficiencies are all directly referable to the modest size of the company.""Very brave, minister"It was an admirably honest assessment. "Very brave, minister" might have been the civil servant's verdict. The decision to put an M&A process out in the open from the get-go was also unusual. One investment banker not involved speculates that Epic might have held private conversations with a suitor and not got anywhere before issuing the statement. Another describes it as "a very high-risk strategy, unless they have a deal in the background that we just don't know about". But a source close to the company says: "Epic wants to find the best solution, and only by kicking it into the public domain can you explore all the options."Epic presumably had the support of big shareholders such as TR Property Investment Trust, which has been vocal about the need for consolidation. In many ways, M&A is more difficult at the shallow end of the industry, where directors may be more attached to lifestyle businesses, portfolios may be of more mixed quality and small market caps don't move the needle for big acquirers. Epic will be an interesting case study.Person, Human, TarmacEpic's Prestatyn Shopping Park. The retail park specialist does not have any pure competitors that would make obvious merger candidatesSince its float in 2014, the company has sold its office and leisure assets to concentrate on retail parks in locations such as Glasgow and Rhyl. It doesn't have any pure competitors – and LondonMetric, which still dabbles in retail parks despite its logistics focus, is understood not to be interested, put off by Epic's holdings in Scotland and Wales. Any partner would have a portfolio that would skew Epic away from retail parks. So getting bigger would come at the cost of straying from the strategy.Deal or no deal?The obvious big suitor would be British Land, which has been active in the retail parks space. Discounts would make it tricky, though. British Land is trading on around a 50% discount to September's NAV of 695p per share. Epic is on around a 35% discount to its September's 95p. Taking British Land paper share-for-share would be dilutive to Epic investors, then, while adjusting for the discrepancy would be dilutive to British Land investors. Not easy.Another prospective industry consolidator, the diversified REIT Picton Property Income, has found that it can take time. Picton danced with Invista Foundation Property Trust in 2011 before it was taken over by Schroders. It looked at flexible office company Workspace in late 2021, but decided the numbers didn't work. Michael Morris, Picton's chief executive, made clear his desire to lead corporate activity at the start of last year, saying transactions were "inevitable". But so far, nothing has transpired."Especially in the property sector, people like to do deals and make things happen," says an industry source. "But if they're not making any money, sometimes it's better not to do deals – and if you think about the direction of the market in the past 18 months, not doing deals has been the right thing.""Epic and its board deserve praise for setting aside self interest and raising the issue so straightforwardly"As this column has previously stated, the minnows need squashing together or taking private. According to Panmure Gordon, more than half the 75 quoted property stocks have market caps of less than £500m. That's 48 companies burning money on stock market overheads – corporate broking, PR and the like – and not benefiting from scale. One investor who fishes in this pool describes them as "lobster pots" because of the way value can get trapped.Epic and its board, chaired by former Schroders veteran William Hill, deserve praise for setting aside self interest and raising the issue so straightforwardly. When a company persistently trades on a discount, the best way to prove the market wrong is to get a bid at a premium or to sell assets at book value or above. Epic might find liquidation easier than M&A – although in the current market, even direct asset sales might be a struggle.Its efforts will be worth watching, because they will test the water for much-needed small-cap consolidation.

[spectoacc] 29/3/2023 05:54

I got this yesterday, with no response to my very specific questions:

"Thank you very much for your email in connection with the strategic review. The Board is really keen to hear from the Company’s private shareholders and I can assure you that your views will be circulated to my fellow directors and the Company’s advisors."


I'd been promised a phone call that never came.

[alan pt] 28/3/2023 22:56

Got a reply to my email today from the chair, similar holding response, but wording sufficiently different that it clearly wasn't just a cut & paste standard response, so credit to him for that

"The Board is really keen to hear from the Company’s private shareholders and I can assure you that your views will be circulated to my fellow directors and the Company’s advisors"

If nothing else, at least we have given some counterbalance to the communication and pressure from, potentially, one institutional holder

[cwa1] 27/3/2023 06:18

Announcement of Interim Dividend

Declaration of Interim Dividend

The Company declares its interim dividend (property income distribution) payment in respect of the period from 1 to 31 March 2023 of 0.4167 pence per share, as timetabled below:


Ex-Dividend 13 April 2023
Date:
Record Date: 14 April 2023
Pay Date: 28 April 2023

This monthly dividend of 0.4167 pence per share equates to an annualised dividend level of 5.00 pence per share and is unchanged from the previous dividend declared on 28 February 2023 .

[flyer61] 26/3/2023 14:57

What Skyship said.

Accept yields are higher but that doesn't have to mean less quality of yield. They recently got an M and S into their Wrexham RP. The challenge is to at least get an M and S food store into all the others. There is hope with what are clearly 'regional' assets. Those Costa drive throughs etc as additional units all add up.

People love driving to RP's where they can park for FREE. Unlike town centres where the State (councils) through various policies have knackered them.

[skyship] 26/3/2023 14:30

TRCML - rents are far lower in the regions than London & the SE - across all sectors - & has always been so. However you are wrong in your main tenet - in regional RW rents are strong and there is good demand.

[trcml] 23/3/2023 10:12

Provincial retail parks and such are inevitably high-yielding because of little or no growth in both rents and investment demand. The big money and the demand is in London and the South-East.

[rambutan2] 23/3/2023 00:26

Last week IPO said they were getting 4.6% on the £100m approx cash drawn down on a credit facility, thus nearly covering the 5.25% it was costing them. And they are not the sharpest of operators by any means. I think it’s time EPIC made it clear what they are/or not earning, and on how much of the cash/drawn facility.

[nickrl] 22/3/2023 21:53

I see BLND picked up three RPs yesterday and sold one.

Capitol Retail and Leisure Park, Preston £51.5m, NIY of 8.43%
Solartron Retail Park, Farnborough for £35m NIY 7.65%
DFS RW, Cambridge for £7.35m NIY 7.14%

and they sold 50% of

Deepdale Retail Park, Preston to Melford Capital for £30.3m NIY 7.5%


Both the RPs were atypical EPIC assets although whether they met Bruces criteria ive no idea and no doubt the BoD have a block on purchases anyhow.